DAILY MORNING NOTE | 9 January 2024

Trades Initiated in the past week

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The Singapore stock market’s key index vacillated between being under and above water for much of trading on Monday (Jan 8). In the end, it finished flat ahead of the week’s key inflation data out of China, Japan and the US. The Straits Times Index ended marginally higher by 2.72 points or 0.1 per cent at 3,187.02. Elsewhere, most key gauges across Asia from Hong Kong and China to South Korea and Australia were in the red while Taiwan bucked the trend to finish higher. Markets in Japan were closed for a holiday.

Wall Street stocks won solid gains on Monday, shrugging off a sluggish first week of the year that investors took as a buying opportunity. The Dow Jones Industrial Average, which had been in negative territory much of the day due to a sell-off in Boeing shares, finished up 0.6 per cent at 37,683.01. The broad-based S&P 500 jumped 1.4 per cent to 4,763.54, while the tech-rich Nasdaq Composite Index surged 2.2 per cent to 14,843.77.


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Events Of The Week

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SG

Chinese property developer Yanlord Land Group expects to record net losses for the six months as well as full year ended Dec 31, 2023, it said in a Monday (Jan 8) bourse filing. The profit guidance announcement comes days after it announced a 52.5 per cent year-on-year fall in its total contracted pre-sales for FY2023 to 32.4 billion yuan (S$6 billion). Flagging the challenging real estate market environment in China, Yanlord said that the probable net loss is primarily attributable to the provision for impairment losses on the group’s certain development properties in the country, as a result of the lower selling prices due to the softer general market demand. It also noted potential fair value losses on certain investment properties in China.

Sabana Industrial Real Estate Investment Trust (Sabana Reit) will not be convening an extraordinary general meeting (EGM), pursuant to a requisition notice from the Sabana Growth Internalization Committee, its manager announced on Monday (Jan 8). The committee, led by activist investor Quarz Capital, had requisitioned the EGM in a letter dated Dec 21, 2023, with 12 resolutions tabled to direct the trustee on the internalisation of the Reit manager. The manager noted that it has not been able to verify “Sabana Growth Internalization Committee” as a unitholder, adding that it does not have records of the notice being deposited at its registered office. Thus, the requisition notice does not comply with the requirements of the trust deed constituting Sabana Reit and the Companies Act 1967, the manager said.

More electric vehicles (EVs) from China are entering Singapore, with Hong Seh Evolution debuting two electric light goods vehicles at the Singapore Motorshow 2024 in January. This is part of Hong Seh Group’s strategy to fill niches in the fully electric commercial vehicle space in the Republic. Hong Seh Evolution is being named as an authorised distributor for a fully electric lorry produced by ShineRay Motors (SRM), with the distributorship agreement to be signed with parent company Brilliance Shineray Chongqing Automotive on Jan 11, the first day of the Singapore Motorshow.


US

Merck has agreed to acquire cancer drugmaker Harpoon Therapeutics for US$680 million as it seeks to solidify its leadership position in the profitable oncology space. The drugmaker will pay US$23 a share for South San Francisco-based Harpoon, it said in a statement on Monday (Jan 8) that confirmed an earlier report by Bloomberg News. Merck is offering more than double Harpoon’s last closing share price on Friday. Harpoon, whose stock has gained 41 per cent in the past year, rose 111 per cent in early trading in New York. Merck shares were little changed.

Boeing shares plunged to close 8 per cent lower on Monday following the temporary grounding of some of its best-selling 737 MAX jets by the US aviation regulator. A piece of fuselage tore off an Alaska Airlines 737 MAX 9 jet on Friday following takeoff from Portland, Oregon, forcing pilots to turn back. The US Federal Aviation Administration (FAA) subsequently ordered the temporary grounding of 171 narrowbody MAX 9 jets with a similar configuration. Wall Street analysts on Monday viewed the accident as a temporary setback to Boeing, but some took a dim view of the incident as another in a series of quality problems related to the 737 MAX family of aircraft.

Blackstone raised US$1.3 billion for its first private equity fund for rich individuals, achieving one of the biggest initial hauls for a fund of its kind despite a delayed launch. The cash pile, disclosed in a filing on Monday (Jan 8), underscores the intensifying race among alternative investment firms to court private wealth as key sources of institutional money dry up. Dubbed BXPE, the fund will invest in private strategies including startups, fund stakes and the buyouts that Blackstone chief executive officer Steve Schwarzman is known for. BXPE’s structure has a different reach from some of the other firm’s products for individuals, president Jon Gray told Wall Street analysts last year. It is targeting people who have at least US$5 million to invest.

United States consumer borrowing surged in November by the most in a year on a jump in credit card balances as the holiday shopping season kicked into high gear. Total credit rose US$23.8 billion after rising a revised US$5.8 billion in October, according to Federal Reserve data out on Monday (Jan 8). The figure well exceeded the highest estimate in a Bloomberg survey of economists, which had a median forecast of US$8.6 billion. Revolving credit outstanding, which includes credit cards, increased US$19.1 billion in November, the most since March 2022. Non-revolving credit, such as loans for vehicle purchases and school tuition, climbed US$4.6 billion. The figures are not adjusted for inflation.

Source: SGX Masnet, Bloomberg, Channel NewsAsia, Reuters, CNBC, WSJ, The Business Times, PSR


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